Afonso Eça, Miguel Ferreira, Melissa Prado, Emanuele Rizzo, 09 December 2021

The rapid growth of FinTech platforms creates challenges and opportunities for financial markets. This column uses a new dataset from a Portuguese FinTech platform to study the determinants of lending demand and the consequences of FinTech loans for small and medium-sized enterprises. It finds that FinTech lending caters mainly to larger SMEs, with higher profitability and a lower credit risk. Additionally, it shows that firms increase assets, employment, and sales following an approved FinTech loan. Finally, FinTech lending allows firms to diversify their pool of lenders and reduce exposure to shocks in the banking system. 

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